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Anvisha [2.4K]
4 years ago
6

Operating profit is essentially a measure of how efficient management is in generating revenues and controlling expenses. True F

alse
Business
1 answer:
Paul [167]4 years ago
3 0

Answer:

true

Explanation:

Operating profit is referred to as the profit gained by the corporation in business. it is calculated by subtracting all expenses from the total profit over the given period.

it is considered to be the best way to determine how management tactics are helpful or beneficial for the organization. it helps to decide on the working policy for future goals.

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a trader creates a long butterfly spread from options with strike prices x, y, and z, where x < y < z, and y is exactly mi
Montano1993 [528]

Answer:

<em>$1006 </em>

Explanation:

A long butterfly is created by following these steps

  •  Long 1 call option for strike X ( highest premium say C)
  • Short 2 call option for Strike Y (premium =C-6.67 )
  •  Long 1 call option for strike Z (premium = C-6.67 - 5.03 = C-11.70 where X<Y<Z

Here, Y-X = Z-Y =$11.70

<u>i) whenever the price at maturity goes below the price of x ( no call option is executed )</u>

payoff =  2*(C-6.67) -C-(C-11.7) = - 13.34 + 11.70 = - 1.64

<u>ii) when the price at maturity is between X and Y, only call with strike X is executed </u>

hence  payoff = -1.64 +(P-X) where P is the Price at maturity

p - x = y-x = 11.70

hence maximum payoff = - 1.64 +  11.70 = $10.06

<u>iii) When the price is between Y and Z , only call with strike X and Y are executed.</u>

hence, payoff = -1.64 + (P-X)  -2* (P-Y) = -1.64 +( 2Y - X - P) and this value decreases as P increases

the minimum payoff occurs when P=Z

So, maximum payoff = -1.64 + (Z-X) - 2*(Z-Y) = -1.64 + 23.4 - 2*11.7 = -$1.64

<u>iv) When the price at maturity is more than Z , all calls are executed</u>

hence, payoff = -1.64 +(P-X) -2* (P-Y) + (P-Z) = -1.64+(2Y-X-Z)

=  -1.64+(Y-X -(Z-Y)) = -1.64+(11.7 - 11.70)

= -$1.64  

 the maximum payoff occurs when P=Y

considering the  four options  traded the maximum payoff = $10.06

<em>Finally determine the maximum net gain when 400 options are traded</em>

<em>= 10.06 * 400 / 4 </em>

<em>= 10.06 * 100 =  $1006 </em>

3 0
3 years ago
Kiersten and her four siblings are starting their own home design business. One of their primary goals is keeping the loving rel
Leto [7]

Answer:

Correct option is D.

Explanation:

An accurate recommendation of the Act is that <u>there should be discussion and well understood ways that the partners will handle disagreements.</u>

8 0
4 years ago
The following information describes production activities of Mercer Manufacturing for the year. Actual direct materials used 24,
UNO [17]

Answer:

(1)

Compute the direct materials price and quantity variances. (Round your answers to 2 decimal places.)

save image

Explanation:

(1)

Standard quantity 30,060 units × 1/2 pound per unit = 15,030 pounds

(2)

Standard hours 30,060 units × 1/6 hour per unit = 5,010 hours

Actual rate per hour = $106,656/5,555 hours = $19.20

Explanation:

7 0
4 years ago
During 2017, Kate Holmes Co.'s first year of operations, the company reports pretax financial income at $250,000. Holmes's enact
r-ruslan [8.4K]

Answer:

a. $224,000

c. Journal Entry

Explanation:

a. Taxable income for 2017 = Pretax financial income - Temporary sales - Depreciation + Unearned rent

= $250,000 - $96,000 - $30,000 + $100,000

= $224,000

c. Journal Entry

Income tax expenses Dr,                            $111,200

($224,000 × 45%) + ($50,400 - $40,000)

Deferred tax assets Dr,                               $40,000

     To income tax payable                                         $100,800

($224,000 × 45%)

      To Deferred tax liability                                        $50,400

For computing deferred tax

Temporary differences    Future taxable   Tax rate   (Assets)  Liability

Installment sales               $96,000             40%                        $38,400

Depreciation rent              $30,000             40%                        $12,000

Unearned rent                  ($100,000)           40%       ($40,000)

Totals                                  $26,000                            ($40,000)  ($50,400)

6 0
4 years ago
Incoterms determine the seller’s and buyer’s respective obligations concerning responsibilities and charges for the transportati
Sergeu [11.5K]

Answer:

True

Explanation:

Hi, the statement is true.

Incoterms (International Commercial Terms) are commercial terms, commonly used in international commercial transactions.

These terms determine the obligations, reponsabilities, costs and risks of  both parts involved in a comercial transaction (  buyer and seller) where goods are delivered.

Incoterms rules are accepted worldwide.

5 0
4 years ago
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